Small Businesses Show Relative Optimism
Small business optimism as measured by the National Federation of Independent Business (NFIB) Index went up slightly in December to 93.9 points, although it is still not near the prerecession average of around 100 points.
According to the survey, manufacturing, construction and professional services are all showing improvement. Additionally, 8 percent of respondents predicted higher sales in 2014, which is an increase of 5 points since November. This reading is the highest it has been since early 2012.
More than half (64 percent) of small business owners reported capital spending, which is the highest level since 2005, and in increase of 9 percent month over month.
“The surge in spending, especially on equipment and fixtures and furniture, is certainly welcome and is hopefully not just an end-of-year event for tax or other purposes. This level of spending is more typical of a growing economy,” the NFIB wrote in its report.
Additionally, business owners added more staff members in December than was predicted. Companies grew by an average of 0.24 workers, the highest reading since February 2006.
The growth in spending and hiring might be due to the fact that 10 percent of those surveyed believe now is a good time to expand their business.
According to a new survey by the New York Federal Exchange, Americans predict low and stable levels of inflation for the foreseeable future. This might also be spurring small business growth.
“Consumer expectations for overall inflation and home prices remained stable in recent months,” the New York Fed said in a statement. “Median earnings and household income growth expectations have remained steady and perceptions of credit access have improved slightly.”
Those who want to take advantage of the low interest rates and stable economy might consider a business cash advance or equipment financing from National Funding. The application is easy to fill out, and you can get your money in 24 hours.